BULLFINCH FUND, INC.
2 LANTERN LANE
HONEOYE FALLS, NEW YORK 14472
(716) 624-1758
1-888-BULLFINCH
(1-888-285-5346)
Annual Report
June 30, 1999
<PAGE>
August 15, 1999
Dear Shareholders:
We are very pleased to present the June 1999 Annual Report of the Bullfinch
Fund, Inc. This report contains the statements for both the Unrestricted Series
and the Western New York Series.
We are happy to report we continue to experienced very good asset growth in the
Unrestricted Series. This is despite a very rocky 3rd quarter (1st quarter
calendar year 1999). We look forward to continued growth in assets in both
Series. At this point in the life of the Series, asset growth continues to be
most important as it allows the expense ratio of the fund to continue
to decline. This report marks the first full fiscal year for the Western
New York Series (it became effective December 30, 1997).
Investments for both funds began to turn around in April of 1999 and the broader
markets started to shift away from the growth style of investing and towards the
value style of investing. We feel we will continue to benefit as more investors
notice this shift. The Western New York Series in particular benefited from a
growing recognition of small-cap and mid-cap stocks. Again, we believe the
markets are in the initial stages of a broader shift in focus and that our
small-cap and mid-cap holdings should benefit as this shift continues to
unfold. Lastly, in what we feel is another positive indicator, nearly one-third
of the companies we hold have begun buying back their own shares.
We wish to thank our shareholders for expressing their confidence in us and
wish them continued good fortune in the coming year.
Best Regards,
Bullfinch Fund, Inc.
Christopher Carosa
President
<PAGE>
UNRESTRICTED SERIES
(A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF
JUNE 30, 1999
TOGETHER WITH
INDEPENDENT AUDITORS' REPORT
BONADIO & CO, LLP
Certified Public Accountants
171 Sully's Trail
Pittsford, NY 14534
716-381-1000
Fax 716-381-3131
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of Bullfinch Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of the
Unrestricted Series (a series within Bullfinch Fund, Inc.), including the
schedule of investments in securities, as of June 30, 1999, and the
related statements of operations, changes in net assets and the financial
highlights and related ratios/supplemental data for the
years ended June 30, 1999 and 1998 and for the period from inception
(February 1, 1997) to June 30, 1997. These financial statements and financial
highlights and related ratios/supplemental data are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these statements and the financial highlights and related
ratios/supplemental data based on our audits.
We conducted our audits in accordance with generally accepted auditing stand-
ards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights and related ratios/supplemental data are free of material mis-
statement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures include-
ed confirmation of securities owned as of June 30, 1999, by correspondence
with the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights and related
ratios/supplemental data referred to above present
fairly, in all material respects, the financial position of the Unrestricted
Series (a series within Bullfinch Fund, Inc.) as of June 30, 1999, and
the results of its operations, the change in its net assets and the financial
highlights and related ratios/supplemental data for the
years ended June 30, 1999 and 1998 and for the period from inception
(February 1, 1997) to June 30, 1997, in conformity with generally accepted
accounting principles.
BONADIO & CO., LLP
Pittsford, New York
August 4, 1999
<PAGE>
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
ASSETS
1999
Investments in securities, at fair value,
identified cost $640,542 $ 693,219
Cash 82,986
Receivable for Capital Stock 138,088
Accrued interest and dividends 790
Prepaid expenses 1,256
Due from Investment Adviser 1,479
Organization expenses, net of accumulated
amortization of $1,838 1,500
--------
Total assets $ 919,318
========
LIABILITIES
Accounts payable 5,270
--------
NET ASSETS
Net assets (equivalent to $11.35
based on 80,537.371 shares of stock outstanding) $ 914,048
=========
COMPOSITION OF NET ASSETS
Shares of common stock $ 886,159
Accumulated net investment loss (24,788)
Net unrealized appreciation on investments 52,677
---------
Net assets at June 30, 1999 $ 914,048
==========
The accompanying notes are an integral part of these statements.
-2-
<PAGE>
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 1999
Historical
Common Stocks - 100% Shares Cost Value
Computer software - 19.2%
Oracle Corporation 3,000 $ 46,411 $ 111,375
Network Associates, Inc. 1,500 46,921 22,031
--------- --------
93,332 133,406
Utilities - 8.3%
Empire District Electric Co. 1,250 21,665 32,578
Hawaiian Electric 700 24,648 24,850
--------- --------
46,313 57,428
Medical Products and Supplies - 7.5%
Dentsply Intl, Inc. 1,350 30,400 38,981
Mentor Corporation 700 17,963 13,038
--------- --------
48,363 52,019
Retail - 6.5%
Dollar General Corporation 1,562 26,308 45,298
Cosmetics - 5.8%
Helen of Troy, Ltd. 2,250 34,440 40,359
Electrical Equipment - 5.3%
Baldor Electric Company 1,850 36,962 36,769
Shoes and Leather - 5.3%
Wolverine World Wide 2,600 44,582 36,400
Banking and Finance - 5.1%
Fiserv, Inc. 1,125 22,369 35,226
Mining - 4.7%
Brush Wellman, Inc. 1,800 41,478 32,625
Steel - 4.7%
A.M. Castle & Co. 1,900 36,530 32,300
Tobacco Products - 4.6%
Phillip Morris 800 28,043 32,150
Instruments - 4.6%
Coherent, Inc. 1,700 34,250 31,663
Leisure and Recreational - 4.3%
International Game Technology 1,600 29,749 29,600
Computers - Hardware - 3.9%
3Com Corp. 1,000 22,900 26,687
Electronics Components - 3.3%
Park Electrochemical Corp. 800 20,771 23,000
Real Estate and Related - 3.2%
First American Financial 1,250 21,869 22,344
Industrial Services - 2.4%
Olsten Corporation 2,650 44,142 16,728
Foods and Beverages - 1.1%
Pepsico Incorporated 200 6,975 7,738
Entertainment - 0.2%
Walt Disney Holding Co. 48 1,166 1,479
--------- ---------
TOTAL COMMON STOCKS $ 640,542 $ 693,219
--------- ---------
$ 640,542 $ 693,219
========= =========
The accompanying notes are an integral part of these statements.
-3-
<PAGE>
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
AND FOR THE PERIOD FROM INCEPTION (FEBRUARY 1, 1997) TO JUNE 30, 1997
1999 1998 1997
INVESTMENT INCOME:
Dividends $ 10,720 $ 8,559 $ 1,634
Interest 2,990 5,301 -
-------- --------- ---------
13,710 13,860 1,634
EXPENSES:
Management Fees 8,102 6,599 589
Reimbursement of Management Fees (1,479) (3,303) -
Custody Fee - - 35
Legal and Professional 3,750 3,000 -
Directors' Fee 600 900 -
Amortization 581 814 444
Fidelity Bond 520 689 -
Taxes 502 637 -
Registration Fees 1,246 676 -
Bank Service Charges 917 404 -
Dues and Subscriptions 144 110 228
--------------------------------
14,883 10,526 1,296
--------------------------------
Investment income(loss) - net (1,173) 3,334 338
--------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) from
securities transactions (21,740) 18 514
Unrealized appreciation (depreciation)
during the period 48,330 (3,930) 8,277
--------------------------------
Net gain (loss) on investments 26,590 (3,912) 8,791
--------------------------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 25,417 $ (578) $ 9,129
================================
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
AND FOR THE PERIOD FROM INCEPTION (FEBRUARY 1, 1997) TO JUNE 30, 1997
1999 1998 1997
INCREASE IN NET ASSETS FROM OPERATIONS:
Investment income (loss) - net $(1,173) $ 3,334 $ 338
Net realized gains (loss) from
securities transactions (21,740) 18 514
Net change in unrealized
appreciation of investments 48,330 (3,930) 8,277
-------------------------------
Increase (decrease) in net assets
from operations 25,417 (578) 9,129
CAPITAL SHARE TRANSACTIONS
Sales (33,858.650, 73,972.543
and 11,247.184 shares) 363,607 832,796 112,471
Redemptions (21,814.254
and 17,275.449 shares) (225,795) (202,999) -
-------------------------------
Total capital share transactions 137,812 629,797 112,471
-------------------------------
Increase in net assets 163,229 629,219 121,600
NET ASSETS:
Beginning of period 750,819 121,600 -
-------------------------------
End of period $ 914,048 $ 750,819 $ 121,600
===============================
The accompanying notes are an integral part of these statements.
-4-
<PAGE>
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(1) The Organization
The Unrestricted Series (the "Series") is a series of the Bullfinch
Fund, Inc. (the "Fund"), which was organized as a corporation in Mary-
land on January 29, 1997, and commenced operations on February 1, 1997.
The Fund had no operations prior to February 1, 1997 other than matters
relating to its organization and registration as an open-end, non-divers-
ified management investment company under the Investment Company Act of
1940, and its registration of securities under the Securities Act of
1933. On February 1, 1997, the Series sold 11,247.184 shares of common
stock ("initial shares") to its initial, joint tenant investors.
The investment objective of the Series is to seek conservative long-term
growth in capital. The Adviser seeks to achieve this objective by using
an asset mix consisting primarily of exchange listed securities and over-
the-counter common stocks as well as U.S. Government securities maturing
within five years.
(2) Summary of Significant Accounting Policies
Cash -
Cash consists of amounts deposited in money market accounts and is not
federally insured. The Series has not experienced any losses on such
amounts and believes it is not exposed to any significant credit risk on
cash.
Security Valuation -
The Series records its investments at fair value.
Securities traded on national securities exchanges or the NASDAQ National
Market System are valued daily at the closing prices of the securities on
those exchanges and securities traded on over-the-counter markets are
valued daily at the closing bid prices. Short-term and money market sec-
urities are valued at amortized cost which approximates market value.
Federal Income Taxes -
For federal income tax purposes, the Series expects to continue to
qualify as a regulated investment company under the provisions of the
Internal Revenue Code by distributing substantially all of its taxable
net income (both ordinary and capital gains) to its shareholders and
complying with other requirements for regulated investment companies.
Therefore, no provision for income taxes is required.
-5-
<PAGE>
Organization Expenses -
Organization expenses are being amortized over a 60-month period.
The Series' initial shareholders have agreed that if any of the initial
shares are redeemed during the first 60 months of the Series' operations
by any holder thereof, the proceeds of the redemption will be reduced by
the pro rata share of the unamortized organization expenses as of the date
of the redemption. The pro rata share by which the redemption proceeds
shall be reduced shall be derived by dividing the number of original
shares redeemed by the total number of original shares outstanding at the
time of the redemption.
Distributions to Shareholders -
The Series has distributed its net investment income and net
realized capital gains to its shareholders on December 29, 1998,
June 30, 1998 and June 30, 1997 in the form of stock dividends equal
to 172.798, 297.096 and 78.803 shares of stock.
Other -
The Series follows industry practice and records security transactions on
the trade date. The specific identification method is used for determin-
ing gains or losses for financial statement and income tax purposes.
Dividend income is recorded on the ex-dividend date and interest income
is recorded on the accrual basis.
Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
(3) Investments
For the year ended June 30, 1999, the Series purchased $317,227 of
common stock. During the same period, the Series sold $100,392 of
U.S. Government obligations and $195,720 of common stock.
For the year ended June 30, 1998, the Series purchased $50,455 of U.S.
Government obligations and $485,826 of common stock. During the same per-
iod, the Series sold $29 of common stock.
For the period ended June 30, 1997, the Series purchased $50,377 of U.S.
Government obligations and $5,541 of common stock. During the same per-
iod, the Series sold $7,663 of common stock and $256 of short-term in-
vestments.
At June 30, 1999, the gross unrealized appreciation for all securities
totaled $134,100 and the gross unrealized depreciation for all securities
totaled $81,423, or a net unrealized appreciation of $52,677. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1999 was $640,542.
At June 30, 1998, the gross unrealized appreciation for all securities
totaled $62,102 and the gross unrealized depreciation for all securities
totaled $57,755, or a net unrealized appreciation of $4,347. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1998 was $641,167.
At June 30, 1997, the gross unrealized appreciation for all securities
totaled $9,862 and the gross unrealized depreciation for all securities
totaled $1,585, or a net unrealized appreciation of $8,277. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1997 was $104,898.
(4) Investment Advisory Agreement
Carosa, Stanton & DePaolo Asset Management, LLC serves as investment
advisor to the Fund pursuant to an investment advisory agreement which
was approved by the Fund's board of directors. Carosa, Stanton & DePaolo
Asset Management, LLC is a registered Investment adviser under the
Investment Advisers Act of 1940. The Investment advisory agreement
provides that Carosa, Stanton & DePaolo Asset Management, LLC,
subject to the supervision and approval of the Fund's board of directors,
is responsible for the day-to-day management of the Series' portfolio
which include selecting the investments and handling its business affairs.
-6-
<PAGE>
As compensation for its services to the Fund, the investment advisor re-
ceives monthly compensation at an annual rate of 1.25% on the first $1
million of daily average net assets and 1% on that portion of the daily
average net assets in excess of $1 million. These fees will be reduced
by any sub-transfer agent fees incurred by the Fund.
Carosa, Stanton & DePaolo Asset Management, LLC has agreed to forego
sufficient investment advisory fees to limit total expenses of the Fund
to 2% of the first $10 million in average assets and 1.5% of the next
$20 million in average assets.
(5) Capital Share Transactions
The Fund has authorized 10,000,000 shares of common stock at $0.01 par
value per share. Each share has equal dividend, distribution and liquid-
ation rights. Transactions in capital stock of the Series were as follows:
Shares Amount
Shares sold during 1997 11,247.184 $ 112,471
Shares issued in 6/30/97 stock dividend 78.803 -
---------- -----------
11,325.987 112,471
---------- -----------
Shares sold during 1998 73,972.543 832,796
Shares redeemed during 1998 (17,275.449) (202,999)
Shares issued in 6/30/98 stock dividend 297.096 -
---------- -----------
56,994.190 629,797
---------- -----------
Shares sold during 1999 33,858.650 363,607
Shares redeemed during 1999 (21,814.254) (225,795)
Shares issued in 12/29/98 stock dividend 172.798 -
---------- -----------
12,217.194 137,812
---------- -----------
80,537.371 $ 880,080
========== ===========
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS AND RELATED RATIOS/
SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
AND FOR THE PERIOD FROM INCEPTION (FEBRUARY 1, 1997) TO JUNE 30, 1997
1999 1998 1997
NET ASSET VALUE, beginning of period $ 10.99 $ 10.74 $ 10.00
------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (0.01) - .03
Net gain on securities both realized
and unrealized .40 .30 .78
------------------------------
.39 .30 .81
------------------------------
STOCK DIVIDEND (.03) (.05) (.07)
------------------------------
NET ASSET VALUE, end of period $ 11.35 $ 10.99 $ 10.74
==============================
NET ASSETS, end of period $ 914,048 $ 750,819 $ 121,600
==============================
Actual Actual Actual *
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.0% 2.0% 1.1% *
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS (0.2%) 0.6% .3% *
PORTFOLIO TURNOVER RATE 40.7% - 6.9% *
* The ratios presented were calculated using operating data for the five
month period from inception (February 1, 1997) to June 30, 1997.
The accompanying notes are an integral part of these statements.
-7-
<PAGE>
WESTERN NEW YORK SERIES
(A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF
JUNE 30, 1999
TOGETHER WITH
INDEPENDENT AUDITORS' REPORT
BONADIO & CO, LLP
Certified Public Accountants
171 Sully's Trail
Pittsford, NY 14534
716-381-1000
Fax 716-381-3131
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of Bullfinch Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of the
Western New York Series (a series within Bullfinch Fund, Inc.), including the
schedule of investments in securities, as of June 30, 1999, and the
related statements of operations, changes in net assets and the financial
highlights and related ratios/supplemental data for the year
ended June 30, 1999 and for the period from inception (September 29, 1997) to
June 30, 1998. These financial statements and financial highlights and related
ratios/supplemental data are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
statements and the financial highlights and related ratios/supplemental data
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights and related ratios/supplemental data are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of June 30, 1999, by
correspondence with the custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements, the financial highlights and related
ratios/supplemental data referred to above present
fairly, in all material respects, the financial position of the Western New
York Series (a series within Bullfinch Fund, Inc.) as of June 30, 1999, and
the results of its operations, the change in its net assets and the financial
highlights and related ratios/supplemental data for the
year ended June 30, 1999 and for the period from inception (September 29, 1997)
to June 30, 1998, in conformity with generally accepted accounting principles.
BONADIO & CO., LLP
Pittsford, New York
August 4, 1999
<PAGE>
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
ASSETS
1999
Investments in securities, at fair value,
identified cost $186,431 $ 171,006
Cash 67,547
Accrued interest and dividends 154
Prepaid expenses 757
Due from Investment Adviser 5,924
Organization expenses, net of accumulated
amortization of $1,100 2,239
--------
Total assets 247,627
--------
LIABILITIES
Accounts payable 5,423
--------
NET ASSETS
Net assets (equivalent to $9.25 per share
based on 26,186.386 shares of stock outstanding) $ 242,204
=========
COMPOSITION OF NET ASSETS
Shares of common stock $ 261,074
Accumulated net investment loss (3,445)
Net unrealized depreciation on investments (15,425)
----------
Net assets at June 30, 1999 $ 242,204
==========
The accompanying notes are an integral part of these statements.
-10-
<PAGE>
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 1999
Historical
Common Stocks - 100% Shares Cost Value
Electrical Equipment - 16.8%
PSC, Inc. 1,950 $ 18,587 $ 19,134
ACME Electric Corporation 1,750 9,171 9,516
--------- --------
27,758 28,650
Computer Hardware - 10.2%
Performance Technologies, Inc. 600 8,232 12,075
3Com Corp 200 4,600 5,338
--------- --------
12,832 17,413
Steel - 8.1%
Bethlehem Steel Corporation 1,000 7,894 7,687
Gibraltar Steel Corporation 250 4,820 6,187
--------- --------
12,714 13,874
Real Estate and Related - 7.2%
Sovran Self Storage 250 6,891 6,734
Home Properties of New York 200 5,623 5,525
--------- --------
12,514 12,259
Electronic Components - 6.1%
Astronics Corporation 605 5,021 6,050
Paxar Corporation 500 4,192 4,438
--------- --------
9,213 10,488
Computer Software - 5.0%
Comptek Research, Inc. 700 4,971 5,643
Network Associates, Inc. 200 5,800 2,938
--------- --------
10,771 8,581
Industrial Materials - 5.0%
American Precision Industries 550 9,776 5,913
Servotronics, Inc. 600 5,624 2,550
--------- --------
15,400 8,463
Railroads - 4.8%
Genessee & Wyoming, Inc. 800 9,941 8,250
Tobacco Products - 4.7%
Phillip Morris, Inc. 200 7,004 8,038
Metal Fabrication and Hardware - 4.3%
Graham Corp. 800 6,076 7,400
Computer Services - 4.0%
Computer Task Group, Inc. 400 10,608 6,800
Manufacturing - 3.7%
Mark IV Industries, Inc. 300 6,462 6,338
Medical Services - 3.7%
Rural/Metro Corporation 650 11,157 6,256
Computer Distributors - 3.0%
Ingram Micro, Inc. 200 6,681 5,150
Commercial Services - 2.8%
Paychex, Inc. 150 4,413 4,781
Environment Services - 2.7%
Sevenson Environmental Srvs, Inc 400 5,071 4,650
Furniture - 2.4%
Bush Industries, Inc. 250 6,263 4,156
Apparel - 2.1%
Hartmarx Corporation 850 6,665 3,559
Industrial Services - 2.0%
American Locker Group, Inc. 400 2,544 3,500
Machinery - 1.4%
Columbus McKinnon Corporation 100 2,344 2,400
--------- ---------
TOTAL COMMON STOCK $ 186,431 $ 171,006
========= =========
The accompanying notes are an integral part of these statements.
-11-
<PAGE>
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1999 AND
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 29, 1997)
TO JUNE 30, 1998
1999 1998
INVESTMENT INCOME:
Dividends $ 2,904 $ 1,705
Interest - 1,121
--------------------
2,904 2,826
--------------------
EXPENSES:
Management Fees 2,042 1,214
Reimbursement of Management Fees (5,924) (3,016)
Legal and Professional 3,750 3,000
Directors' Fee 600 300
Amortization 776 324
Fidelity Bond 458 230
Taxes 382 238
Registration Fees 607 341
Bank Service Charges 767 -
Dues and Subscriptions 71 -
--------------------
3,529 2,631
--------------------
Investment income (loss) - net (625) 195
--------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) from
securities transactions (2,829) -
Unrealized appreciation (depreciation)
during the period (18,496) 3,071
--------------------
Net gain (loss) on investments (21,325) 3,071
--------------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $(21,950) $ 3,266
====================
The accompanying notes are an integral part of these statements.
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JUNE 30, 1999 AND
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 29, 1997)
TO JUNE 30, 1998
1999 1998
DECREASE IN NET ASSETS FROM OPERATIONS:
Investment income (loss) - net $ (625) $ 195
Net realized gain (loss) from
securities transactions (2,829) -
Net change in unrealized
appreciation (depreciation) of investments (18,496) 3,071
--------------------
Increase (decrease) in net assets from operations (21,950) 3,266
CAPITAL SHARE TRANSACTIONS
Sales (11,777.098 and 16,850.33 shares) 108,178 172,964
Redemptions (2,458.779 and 0 shares) (20,254) -
--------------------
Total capital share transactions 87,924 172,964
--------------------
Increase in net assets 65,974 176,230
NET ASSETS:
Beginning of period 176,230 -
--------------------
End of period $242,204 $176,230
====================
The accompanying notes are an integral part of these statements.
-13-
<PAGE>
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(1) The Organization
The Western New York Series (the "Series") is a series of the Bullfinch
Fund, Inc. (the "Fund") which was organized as a corporation in Mary-
land on January 29, 1997 as an open-end, non-diversified management
investment company under the Investment Company Act of
1940. On September 29, 1997, the Fund sold 10,500 shares of the
Series to its initial investor for $105,000.
The investment objective of the Series is to seek capital appreciation
through the investment in common stock of companies with an important
economic presence in the Greater Western New York Region. The Adviser
seeks to achieve this objective by using an asset mix consisting primarily
of exchange listed securities and over-the-counter common stocks as well
as U.S. Government securities maturing within five years.
(2) Summary of Significant Accounting Policies
Cash -
Cash consists of amounts deposited in money market accounts and is not
federally insured. The Fund has not experienced any losses on such
amounts and believes it is not exposed to any significant credit risk on
cash.
Security Valuation -
The Series records its investments at fair value.
Securities traded on national securities exchanges or the NASDAQ National
Market System are valued daily at the closing prices of the securities on
those exchanges and securities traded on over-the-counter markets are
valued daily at the closing bid prices. Short-term and money market sec-
urities are valued at amortized cost which approximates market value.
Federal Income Taxes -
For federal income tax purposes, the Series expects to continue to
qualify as a regulated investment company under the provisions of the
Internal Revenue Code by distributing substantially all of its taxable
net income (both ordinary and capital gains) to its shareholders and
complying with other requirements for regulated investment companies.
Therefore, no provision for income taxes is required.
-14-
<PAGE>
Organization Expenses -
Organization expenses are being amortized over a 60-month period.
The Series' initial shareholder has agreed that if any of the initial
shares are redeemed during the first 60 months of the Series' operations
by any holder thereof, the proceeds of the redemption will be reduced by
the pro rata share of the unamortized organization expenses as of the date
of the redemption. The pro rata share by which the redemption proceeds
shall be reduced shall be derived by dividing the number of original
shares redeemed by the total number of original shares outstanding at the
time of the redemption.
Distributions to Shareholders -
The Series has distributed its net investment income and net realized
capital gains to its shareholders on June 30, 1998 in the form of a stock
dividend equal to 17.737 shares of stock.
Other -
The Series follows industry practice and records security transactions on
the trade date. The specific identification method is used for determin-
ing gains or losses for financial statement and income tax purposes.
Dividend income is recorded on the ex-dividend date and interest income
is recorded on the accrual basis.
Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
(3) Investments
For the period ended June 30, 1999, the Series purchased $77,365 of
common stock. During the same period, the Series sold $24,463 of
common stock.
For the period ended June 30, 1998, the Series purchased $98,879 of U.S.
Government obligations and $136,357 of common stock.
At June 30, 1999, the gross unrealized appreciation for all securities
totaled $12,525 and the gross unrealized depreciation for all securities
totaled $27,950, or a net unrealized depreciation of $15,425. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1999 was $186,431.
At June 30, 1998, the gross unrealized appreciation for all securities
totaled $16,011 and the gross unrealized depreciation for all securities
totaled $12,940, or a net unrealized appreciation of $3,071. The aggre-
gate cost of securities for federal income tax purposes at June 30,
1998 was $136,357.
(4) Investment Advisory Agreement
Carosa, Stanton & DePaolo Asset Management, LLC serves as investment
advisor to the Fund pursuant to an investment advisory agreement which
was approved by the Fund's board of directors. Carosa, Stanton &
DePaolo Asset Management, LLC is a registered Investment adviser under
the Investment Advisers Act of 1940. The Investment advisory agreement
provides that Carosa, Stanton & DePaolo Asset Management, LLC,
subject to the supervision and approval of the Fund's board of directors,
is responsible for the day-to-day management of the Fund's portfolio
which include selecting investments and handling its business affairs.
-15-
<PAGE>
As compensation for its services to the Fund, the investment advisor re-
ceives monthly compensation at an annual rate of 1.25% on the first $1
million of daily average net assets and 1% on that portion of the daily
average net assets in excess of $1 million. These fees will be reduced
by any sub-transfer agent fees incurred by the Fund.
Carosa, Stanton & DePaolo Asset Management, LLC has agreed to forego
sufficient investment advisory fees to limit total expenses of the Fund
to 2% of the first $10 million in average assets and 1.5% of the next
$20 million in average assets.
(5) Capital Share Transactions
The Fund has authorized 10,000,000 shares of common stock at $0.01 par
value per share. Each share has equal dividend, distribution and liquid-
ation rights. Transactions in capital stock of the Series were as follows:
Shares Amount
Shares sold during 1998 16,850.330 $ 172,964
Shares issued in 6/30/98 stock dividend 17.737 -
---------- -----------
16,868.067 172,964
---------- -----------
Shares sold during 1999 11,777.098 108,178
Shares redeemed during 1999 (2,458.779) (20,254)
---------- -----------
9,318.319 87,924
---------- -----------
26,186.386 $ 260,888
========== ===========
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS AND RELATED RATIOS/
SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING
FOR THE YEAR ENDED JUNE 30, 1999 AND
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 29, 1997)
TO JUNE 30, 1998
1999 1998
NET ASSET VALUE, beginning of period $ 10.45 $ 10.00
--------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.05) .02
Net gain (loss) on securities both
realized and unrealized (1.15) .44
--------------------
(1.20) .46
--------------------
STOCK DIVIDEND - (.01)
--------------------
NET ASSET VALUE, end of period $ 9.25 $ 10.45
====================
NET ASSETS, end of period $ 242,204 $ 176,230
====================
Actual Actual*
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.0% 2.0%*
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (0.4%) 0.2%*
PORTFOLIO TURNOVER RATE 13.9% -
* The ratios presented were calculated using operating data for the nine
month period from inception (September 29, 1997) to June 30, 1998.
The accompanying notes are an integral part of these statements.
-16-
<PAGE>
